ACCOMMODATIVE FOR GROWTH

The RBI noted that though there is a risk of imported inflation because of the tariffs, the potential impact on growth is more pressing

- BY TEENA JAIN KAUSHAL

THE RESERVE BANK of India (RBI) had the unenviable task of setting the policy direction for the Indian economy on the day US President Donald Trump’s “reciprocal” tariffs came into force on April 9. With the world engulfed in a haze of uncertainty about the potential repercussions of the decision, the Indian central bank chose to cut the repo rate by 25 basis points (bps) to 6% and shift its stance to ‘accommodative’ to indicate support for liquidity and future growth.

It was the second policy address by Sanjay Malhotra since taking over as RBI Governor in December. This is the second consecutive rate cut after the 25 bps reduction in February.